In­dus­try, states ask for no de­ci­sion yet

Trump of­fi­cials this week started a push to kill a stalled rul­ing on land pro­tec­tion.

The na­tion’s stalled rule to pro­tect pub­lic land against harm from frack­ing faced mul­ti­ple threats Thurs­day af­ter the oil and gas in­dus­try and states, in­clud­ing Col­orado, asked a fed­eral ap­peals court to hold off in­def­i­nitely on de­cid­ing whether it is le­gal.

Trump ad­min­is­tra­tion of­fi­cials ear­lier this week launched a rule­mak­ing process aimed at killing the rule out­right. A lower fed­eral court had al­ready de­ter­mined the Bu­reau of Land Man­age­ment lacks the power to make such a rule.

This is hap­pen­ing as com­pa­nies in­crease pro­duc­tion of fos­sil fu­els by drilling across mil­lions of acres of fed­eral pub­lic land, mostly in the West. In Col­orado, oil and gas com­pa­nies have drilled 6,434 wells on fed­eral pub­lic land.

The rule, passed in March 2015, would up­date an ex­ist­ing 35-yearold rule that BLM of­fi­cials have used to guide oil and gas op­er­a­tions al­lowed on pub­lic land.

The idea was to put in place pro­tec­tion so that in­creased drilling could be done in a way that min­i­mizes harm to air, land, wa­ter and wildlife. Fed­eral of­fi­cials felt they needed to deal with mod­ern oil and gas pro­duc­tion tech­niques, in­clud­ing hy­draulic frac­tur­ing, which in­jects mil­lions of gal­lons of wa­ter, sand and chem­i­cals deep un­der­ground to coax out oil and gas.

The rule that ap­plies to­day lets com­pa­nies dis­pose of in­dus­try waste liq­uids in un­lined open pits, with lim­ited re­view of drilling plans. It doesn’t re­quire com­pa­nies to dis­close the chem­i­cals they use.

For five years, BLM of­fi­cials un­der the Obama ad­min­is­tra­tion hashed out the new rule, only to see it hung up in court as the in­dus­try and states sued. The new rule would re­quire ear­lier re­view of drilling plans, the use of stor­age tanks in­stead of pits to cap­ture waste, tougher well test­ing and some dis­clo­sure of chem­i­cals.

On Thurs­day, 10th Cir­cuit Court of Ap­peals judges heard ar­gu­ments for and against a Septem­ber 2015 rul­ing by U.S. Dis­trict Court Judge Scott Skav­dahl in Wy­oming.

Skav­dahl de­ter­mined the BLM has no au­thor­ity to reg­u­late frack­ing.

U.S. Depart­ment of Jus­tice at­tor­ney Andy Mer­gen, rep­re­sent­ing the BLM, asked the three-judge ap­peals court panel for an in­def­i­nite de­lay while Trump of­fi­cials run a mul­ti­year process to re­scind and re­place the Obama-era rule. No need to de­cide now the is­sue of whether the BLM has au­thor­ity, Mer­gen ar­gued, not­ing “the pres­i­dent has made this a pri­or­ity.”

Judge Mary Beck Briscoe asked: “How can you pro­ceed with a rule­mak­ing when the dis­trict court has told you you have no au­thor­ity?”

Mer­gen said gov­ern­ment at­tor­neys ac­tu­ally do be­lieve the BLM has au­thor­ity to reg­u­late frack­ing, but that fed­eral of­fi­cials still want the court to de­lay a rul­ing un­til the process of re­scind­ing the 2015 rule is done.

Judge Jerome Holmes said he’s con­cerned ex­ec­u­tive branch of­fi­cials are “jerk­ing around our dock- et” by ask­ing ap­peals judges “to hold some­thing in abeyance for what could be for­ever.”

“All this rule does is up­date the agency’s ex­ist­ing reg­u­la­tion,” Free­man said.

Trump of­fi­cials on Tues­day pro­posed killing the 2015 rule for frack­ing on fed­eral pub­lic and tribal land. They said the rule would im­pose un­jus­ti­fi­able costs on oil and gas com­pa­nies — $32 mil­lion to $45 mil­lion a year.

The court dis­cus­sion Thurs­day re­volved around which fed­eral agen­cies have power to reg­u­late oil and gas op­er­a­tions and the ex­tent of al­low­able over­lap. While the BLM over­sees ac­tiv­i­ties on pub­lic land, the En­vi­ron­men­tal Pro­tec­tion Agency tra­di­tion­ally has reg­u­lated ac­tiv­i­ties af­fect­ing health and the en­vi­ron­ment, in­clud­ing pol­lu­tion of wa­ter.

Judge Har­ris Hartz asked whether Congress in­tended the Safe Drink­ing Wa­ter Act, as op­posed to the Fed­eral Land Pol­icy and Man­age­ment Act that gov­erns the BLM, to be the “ex­clu­sive means” of pro­tect­ing wa­ter from con­tam­i­na­tion. He sug­gested the drink­ing wa­ter act may “con­cen­trate that ex­per­tise” within the EPA.

“You can have dif­fer­ent agen­cies reg­u­lat­ing the same thing but they are do­ing it for dif­fer­ent pur­poses,” Judge Holmes said.

Un­der an agree­ment with the BLM, state reg­u­la­tors in Col­orado share re­spon­si­bil­ity with the feds for over­see­ing oil and gas op­er­a­tions on fed­eral pub­lic land. State rules re­quire lim­ited dis­clo­sure of chem­i­cals. But Col­orado’s rules, too, al­low open pits for dis­posal of waste, though some on fed­eral lands must be lined to min­i­mize leaks into soil and wa­ter.

The West­ern En­ergy Al­liance in­dus­try group con­tends states — not fed­eral agen­cies — should reg­u­late oil and gas op­er­a­tions. “Not only do states have rules reg­u­lat­ing frack­ing, but they also have rules reg­u­lat­ing drink­ing wa­ter,” al­liance pres­i­dent Kath­leen Sgamma said.

Fed­eral of­fi­cials de­clined to dis­cuss the is­sues on the record.

BLM spokesman Steven Hall re­sponded to queries by email say­ing agency of­fi­cials can­not dis­cuss a case in lit­i­ga­tion. But, he wrote, “BLM will con­tinue to work with part­ners to en­sure safe op­er­a­tions on fed­eral lands” and “BLM con­ducts reg­u­lar in­spec­tions of drilling op­er­a­tions on fed­eral lands.”

And Hall wrote that BLM of­fi­cials “can re­quire that all pits be lined” or re­quire com­pa­nies to use stor­age tanks us­ing a “de­ci­sion­mak­ing process.”

Den­ver-based at­tor­ney Mark Bar­ron, rep­re­sent­ing the In­de­pen­dent Petroleum As­so­ci­a­tion of Amer­ica and the West­ern En­ergy Al­liance, called the 2015 rule “a so­lu­tion in search of a prob­lem” be­cause “it is largely du­plica­tive of ex­ist­ing rules un­der fed­eral and state law.”

Bar­ron said the in­dus­try wants a rule that gives com­pa­nies “op­er­a­tional flex­i­bil­ity re­gard­ing whether to use a lined pit or above­ground tanks.”

“Pits fre­quently of­fer op­er­a­tors greater abil­ity to ser­vice mul­ti­ple wells from one lo­ca­tion – re­duc­ing truck traf­fic and sur­face dis­tur­bance – and fre­quently fa­cil­i­tate an op­er­a­tor’s abil­ity to treat wa­ter in the field for re-use and re­cy­cling,” he said.

“A rule that op­ti­mized en­vi­ron­men­tal sen­si­tiv­ity would have given pro­duc­ers, work­ing with BLM, the op­er­a­tional flex­i­bil­ity to de­ter­mine whether pits or tanks worked best for a given project,” he said.